Dolpag Pty Ltd v McCarthy - [2000] WASC 133

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DOLPAG PTY LTD -v- McCARTHY & ORS [2000] WASC 133

CORAM: MASTER SANDERSON

HEARD: 17 MAY 2000

DELIVERED : 24 MAY 2000

FILE NO/S: CIV 2357 of 1999

BETWEEN: DOLPAG PTY LTD (ACN 054 277 744)
Plaintiff
AND
PHILIP CHARLES McCARTHY
First Defendant
CARL ROBERT MAYOR
Second Defendant
MONEY TALKS (WA) PTY LTD (ACN 087 190 618)
Third Defendant

Catchwords:

Practice and procedure - Form of order after appeal - Turns on its own facts

Legislation:

Supreme Court Rules, O26A r 4, r 6(1), O 26 r 7(3)

Result:

Order in terms of minutes proposed by defendants

Representation:

Counsel:

Plaintiff:     Mr A Metaxas
First Defendant             :     Mr J C Giles
Second Defendant         :     Mr J C Giles
Third Defendant           :     Mr J C Giles

Solicitors:

Plaintiff:     Arthur Metaxas & Co
First Defendant             :     Solomon Brothers
Second Defendant         :     Solomon Brothers
Third Defendant           :     Solomon Brothers

Case(s) referred to in judgment(s):

McCarthy v Dolpag Pty Ltd [2000] WASCA 106

Case(s) also cited:

Nil

MASTER SANDERSON: This matter comes back before the court after an appeal which was in part successful. The application relates to pre‑action discovery under O 26A r 4. The order that I made at first instance was in the following terms:
"Within 28 days from the date of this order each of the defendants give discovery of all the documents that are or have been in their respective possession, custody or power relating to all transactions undertaken by each of the defendants in arranging loans or financial accommodation in the period from 1st day of July to 31 December 1999."
The Full Court granted leave to appeal, allowed the appeal and ordered that the application be remitted back to this Court to be determined in accordance with the reasons of the Court: see McCarthy v Dolpag Pty Ltd [2000] WASCA 106.
The question now to be determined is what order is to be made on the application. Despite the best efforts of the solicitors for the parties, no agreement has been possible. Each of the solicitors has tendered a minute of proposed orders - the minute tendered on behalf of the plaintiff being dated 17 May 2000 and the minute tendered on the part of the defendants being dated 12 May 2000. The difference between what each party proposes can be summarised in the following way. The plaintiff wants documents relating to customers or former customers of the plaintiff up to 31 December 1999. The plaintiff also wants documents which arose by virtue of a referral from those customers or former customers of third parties who were not themselves directly customers or former customers of the plaintiff.
For their part, the defendants wish to limit discovery to documents which do not contain any financial information on the prospective borrower. They also seek to limit discovery to only those clients of The Professionals or of The Summit Group.
As the matter was argued it became clear that there was not really much dispute between the parties as to what categories of documents should be discovered. The real difference was that the defendants wanted to exclude from discovery financial details provided by applicants for finance. That seems to me to be reasonable. The financial details of particular individuals is of no relevance to the plaintiff in determining whether or not it has a cause of action.
The more difficult question is whether or not discovery ought be limited to those documents which related to The Professionals and The Summit Group. In reaching their conclusion, the Full Court said (at par 15 and 16):
"[15] We have come to the conclusion, however, that the order is a little too wide. It is not necessary that the respondent have discovery of all the appellants' broking records relating to all of their customers in the period in question. It must be borne in mind that the parties are business competitors. Orders for discovery of business records especially of competitors, should be no wider than necessary. We think that discovery before action in this case should be limited to documents relating to or arising from dealings with clients of The Professionals or The Summit Group; and with the groups themselves.
[16] This is not intended to be a definitive statement of the categories of documents that ought, at this stage, to be covered by the order. The point is, however, that only those documents actually relevant to a cause of action which the respondent may have for breach of the restraint covenants ought to be the subject of the discovery order. On this narrow ground, we would set aside the present order and remit the matter to Master Sanderson for reconsideration by him of the appropriate form of order in the light of this judgment."
If par 15 stood alone there could be no doubt that the discovery should be limited to those documents which cover dealings with clients of The Professionals or The Summit Group. The question is whether or not that conclusion is affected by the words of par 16. It was the plaintiff's submission that what the Court intended to do was suggest that the order should be limited to clients of The Professionals and The Summit Group but leave the matter to my discretion. The defendants submitted that it was the intention of the Court to limit discovery to clients of these two groups, but not to define what documents should be discovered by these two groups. In other words, the discretion that I was to exercise related only to the documents to be discovered, not to from whom they should be discovered.
When dealing with this matter at first instance, the plaintiff put its case on a broad footing. It was submitted that the evidence showed that the plaintiff may have a case against the defendants in relation to clients of The Professionals and The Summit Group. Having established that possibility, but not having available documents related to other transactions, the plaintiff wanted broad discovery. Without that broad discovery the plaintiff would be left not knowing and unable to ascertain whether or not there had been any breach by the defendants of the restraint of trade covenant in relation to clients other than those referred by The Summit Group and The Professionals. At the time, I found the argument persuasive. I was satisfied that the evidence established that the plaintiff may have a cause of action against the defendants. I sought no basis for limiting that cause of action by reference to clients of The Professionals or The Summit Group.
On balance, it seems to me the Full Court took a different view. I accept the defendants' submission that the Court was of the view that discovery ought be limited to documents related to The Summit Group and The Professionals and would therefore limit discovery, pursuant to O 26A r 6(1) and O 26 r 7(3).
That then leaves the question of whether, as the plaintiff contends, documents related to customers referred by other customers should be included in the discovery order. Having concluded that it was the intention of the Full Court to limit the scope of discovery and based upon reference just to customers referred by The Summit Group and The Professionals, it would seem to me to include any further class of persons would be to go beyond what was intended by the Full Court. I would not therefore order the additional discovery.
In the circumstances, I am satisfied that the order ought properly be in terms of par 1 of the minute proposed by the defendants. In relation to costs, I am satisfied that the costs ought be reserved pending consideration by the plaintiff as to whether or not proceedings will be issued. If proceedings are not issued then that will lead to one costs order. If they are, a different costs order might be made.